Allegro.eu's Polish unit fined $48 mln for violation of competition rules

Poland's anti-monopoly office on Thursday fined the Polish unit of Luxembourg-based e-commerce group Allegro.eu just over 210 million zlotys ($48 million), saying it had broken competition rules and violated its own terms and conditions.

Tomasz Chrostny, the president of watchdog UOKiK, said in a statement that the company had favoured its own online store on the Allegro.pl platform at the expense of independent traders who offered the same or similar products, and slapped it with a 206.2-million-zloty penalty.

The consequences of this practice could be felt by customers, who could have had restricted opportunities to find the offer that suited them best," Chrostny said.

He said such favouritism towards Allegro's own trading activity was possible due to the company playing a "double role" combining its shopping platform business with retail sales on the domain.
UOKiK also fined Allegro nearly 4 million zlotys on Thursday for terms violations.

"Allegro will analyse the reasons for both decisions mentioned in UOKiK president's release and take all necessary steps towards having them revoked," the company said in a statement e-mailed to Reuters.

"Allegro disagrees with the UOKiK president's decision, maintains it does not hold a dominant position and does not favour its own store in an anticompetitive way," it said.

The company also said that 99% of sales on Allegro.pl were carried out by independent sellers and the remaining 1% through its own store.

According to the investigation carried out by the watchdog, Allegro started favouring its own retail sales operations in May 2015.

The company would use information inaccessible to other traders, such as search algorithms or data on buyer behaviour, to improve the positioning of its own offers in the platform's search results, UOKiK said.

Allegro has the right to appeal to Poland's Court of Competition and Consumer Protection.
Shares in Allegro.eu retreated sharply from the day's highs following the news before climbing back to close up 2.5%.

"The penalty is nominally severe... (but) in terms of its impact on the Allegro share price it is insignificant," Santander BM analyst Tomasz Sokolowski told Reuters.